The housing market has kicked off the new year with a strong upturn following a remarkable surge in property prices. According to Rightmove, the average home price has risen by nearly £9,900 to reach £368,031 since December. This 2.8% increase represents the largest January spike in Rightmove’s 25-year history of reporting and the most significant month-on-month growth since June 2015.
Rightmove attributed this market rebound to Chancellor Rachel Reeves’ Budget announcement at the end of November, which dispelled prior uncertainties that had been dampening activity. Despite the positive momentum, Rightmove cautioned that selling homes remains challenging. The number of properties available for sale is at its highest for this time of year since 2014, with a third of listed homes experiencing price reductions. Market conditions vary widely across regions, with the market being described as “volatile.” Notably, while prices rose in most areas, the East Midlands and Scotland saw declines.
Buyer demand surged after Christmas Day, with a 57% increase in inquiries to agents and an 81% rise in newly listed properties compared to the preceding two weeks. The market has been buoyed by decreasing mortgage rates, following significant cuts by major lenders toward the end of 2025 and the beginning of 2026.
Colleen Babcock, a property expert at Rightmove, expressed optimism at sellers listing homes at higher prices, signaling increased buyer interest after a period of subdued price growth. She advised sellers to heed their agents’ guidance when setting asking prices, emphasizing the need for realism given the current market dynamics. Myles Moloney, director at Chase Buchanan estate agents in London, observed a bustling market, particularly for homes meeting specific buyer preferences like open-plan living spaces and proximity to quality schools.
Overall, the market is witnessing heightened activity driven by well-presented, sensibly priced homes that cater to modern family living expectations. Improved affordability due to mortgage rate reductions is further encouraging buyer engagement, with early 2026 showing a surge in family home buyers eager to secure their next property ahead of the traditional spring market.